We regularly get asked to provide Return on Investment (ROI) calculations and we are always happy to do so. Why? Well it is almost impossible to do a like-for-like comparison with a selection of products based on quotes alone. This is because the cost on the initial outlay of the product is only one of the factors to take into consideration during the lifetime of the product. These are the factors that we build in to our ROI calculations:
- Cost of product – of course, if you are replacing fittings, you need to know how much they will cost.
- Cost of energy – very often, if a client is switching from “old tech” to LED this is one of the obvious areas where they are going to save money but not all LED products have the same efficiencies. Is the LED product running at 80 lumens per watt or 140 lumens per watt? The less efficient product is going to use nearly twice as much energy. Very often, a more expensive but more efficient LED product will be cheaper in the long run than a seemingly cheaper product with a lower efficiency. Energy costs are increasing and one of the best ways to future-proof against these costs is by ensuring that you have the most efficient technology.
- Cost of installation – for many organisations, this is a “hard” cost – with contractors being hired to install. Where this is the case, it is essential to know that the product that you are selecting is easy to install. It is possible to have an LED product which is easy to install, requires no-tooling and offers choice of lighting output for the client once it is installed – 5 minutes of work for the contractor. It is also possible that the LED product that you have selected will be complicated to install and could take 10 times longer for the contractor. The contractor will definitely charge for this time!
- Grants and tax breaks – there are many grants and tax breaks available for switching to LED lighting and we can build these in to the calculations – every little helps.
- Cost of maintenance – “Old tech” might need lamp replacements several times per year. Where are these products installed? Can you get to them easily? Do you need to hire equipment to replace fittings or lamps? With an LED product that will last for 50,000 hours, you can significantly reduce your maintenance costs – once the products are installed, under normal circumstances, you shouldn’t have to think about them for about 5 years.
When we do a Return on Investment calculation, we will provide you with a clear breakdown of initial costs and ongoing costs so that you can truly understand what the benefits of switching to LED would be. Very often, the return on investment is around 1 year, which is usually an easy decision to make.
Contact Novah today for a Return on Investment calculation for your project and we will be delighted to help you.